Posted
by
Unknown Lameron Wednesday July 10, 2013 @10:17AM
from the captains-of-industry dept.

Despite many publishers themselves settling with the DOJ over allegations of price fixing ebooks, Apple held firm and recently went to trial. And now the verdict is in: Apple conspired with major publishers to control ebook prices in violation of anti-trust laws. A trial for damages has been ordered. Quoting Reuters: "The decision by U.S. District Judge Denise Cote in Manhattan is a victory for the U.S. government and various states, which the judge said are entitled to injunctive relief. ... Cote said the conspiracy resulted in prices for some e-books rising to $12.99 or $14.99, when Amazon had sold for $9.99. 'The plaintiffs have shown that the publisher defendants conspired with each other to eliminate retail price competition in order to raise e-book prices, and that Apple played a central role in facilitating and executing that conspiracy,' Cote said. 'Without Apple's orchestration of this conspiracy, it would not have succeeded as it did in the spring of 2010,' she added."Update: 07/10 16:36 GMT by U L: The ruling is now available (160 page PDF).

"Jim Hollock’s first book, a true-crime tale set in Pennsylvania, got strong reviews and decent sales when it appeared in 2011. Now “Born to Lose” is losing momentum — yet Amazon, to the writer’s intense frustration, has increased the price by nearly a third.

Jim Hollock wrote a true-crime story set in Pennsylvania.

Mr. Hollock’s first book had decent sales when it appeared in 2011, but now that it is losing momentum, Amazon raised the price.

“At this point, people need an inducement,” said Mr. Hollock, a retired corrections official. “But instead of lowering the price, Amazon is raising it.”

Other writers and publishers have the same complaint. They say Amazon, which became the biggest force in bookselling by discounting so heavily it often lost money, has been cutting back its deals for scholarly and small-press books. That creates the uneasy prospect of a two-tier system where some books are priced beyond an audience’s reach."

An e-book is a specially formatted text document which includes additional metadata making it easier to use on specialized e-book readers. Nothing more, nothing less. If you actually shop around, as opposed to just grabbing a Kindle, you'll notice that a lot of stores (and certain publishers in particular) do not put DRM on some books (I'm particularly impressed by Tor, who almost always have DRM-free copies available). DRM isn't fundamentally part of the "e-book", even though your post implies that publishers have successfully convinced you that it is.

You don't understand what collusion is, do you? The sellers specifically conspired together to artificially raise prices, which bypasses the normal supply and demand pricing and allows them to do whatever the hell they wish. If we'd actually allow such a thing, you'd see a lot of goods suddenly inflate in price for no reason whatsoever because by colluding corporations can lock you out of any alternative. Collusion breaks the principle of a free market by removing competition.

This is 100% true. I don't think I've ever seen a Judge say something like this one did. Seem 100% guarantee of a new trial upon apeal.

Not true. His statement was at a hearing to decide if the case would be thrown out because of lack of evidence. The Judge simply stated the feds had evidence. The Judge made his statement because Apple asked for his opinion at that point. He was required by law to say something.

The case had little to do with the 'correct' price of ebooks, and a whole lot to do with elimination of the word 'freely' that you used.

Prior to the agreement Apple made with publishers, the publisher could set their own price that the retailer paid. Nothing wrong with that. In turn, the retailer set their own price that the consumer paid. Nothing wrong with that either.

After the agreement with Apple, the publisher set the price that the consumer paid. Not really anything wrong with that (yet). However, the publishers were still using the retailers to 'sell' the books, but the retailers were no longer able to set the price they asked. Now we have a problem. Why should an agreement that Apple has with a publisher to collect 30% on every sale force Amazon to also take a 30% cut? Why should Amazon not be able to lower the price it's customers pay by taking less than a 30% cut? THAT is where the price fixing comes into play. Amazon used to be able to set the price it's customers pay, and no longer can. That is why the prices are said to be 'artificially' set. There no longer is any competition, as the collusion between Apple and the publishers has eliminated it.

By your logic Target & Wal-Mart are treading on anti-trust grounds ever time they have a sale. When a retailer (like Amazon) buys a product wholesale (like ebooks) they have every right in the world to resell that product for whatever price they wish to set. Did/does Amazon have a large share of the ebook market? Yes, because they aggressively pursued that market and do more to market ebooks than anyone, the publishers included.
You do not have to have Kindle hardware to read Kindle books because Amazon freely distributes their reader software for numerous devices, just like you can put ePub reading software for Nook books on a Kindle.

Collusion. Apple got all of the publishers together and they worked out a deal that would fix the prices. You do not need a dominant position in order to be charged with collusion although it normally results in one party getting the upper hand. In this case no one could sell for less then apple which devalued groups like amazon who would sell some books at a loss to build up there customer base.